GST
TRT-2025-
High court of Delhi
Date:-15-09-25
In:-
Issue Favourable to Tax Payer ?:-
Order date: 15 Sept 2025
Parties: Ernst & Young Ltd. v. Assistant Commissioner, Vasant Kunj & Anr.
Facts –
- Petitioner (E&Y) sought interest on delayed GST refunds for FYs 2017–18 to 2021–22. Refunds were sanctioned through orders-in-original in June 2023 and August 2023.
- Petitioner computed interest liability at approx. ₹28.4 lakhs, applying 6% and 9% rates under Section 56 of the CGST Act. Revenue opposed, arguing delay was due to deficiencies in applications and suggested remand based on GS Industries precedent.
- Petitioner relied on Bansal International and other HC judgments to assert entitlement to statutory interest.
Issue -
- Whether the petitioner is entitled to interest on delayed GST refunds under Section 56, and from which date/rate (6% or 9%) such interest should accrue?
Order -
- The Court held that interest is a statutory right under Section 56 of the CGST Act and must follow the timelines prescribed.
- It clarified that Interest @ 6% is payable if refund is not granted within 60 days from the date of filing the first application (FORM GST RFD-01).
- Interest @ 9% applies where refund is granted pursuant to appellate orders and 60 days have lapsed from the date of the second application.
- The Court stressed that deficiency memos under Rule 90 must be issued within 15 days; any delay in issuing such memos cannot be used to prejudice taxpayers or deny them timely interest. The matter was remanded to the Adjudicating Authority to recompute the exact interest liability in terms of these principles.
- The recomputation was directed to be completed within two months, and payment of due interest must be made within one month thereafter.
Download Case Law
